The Hindu Business Line : Plan panel proposes $492 b for infrastructure

“This kind of investment is required if India is to attain a sustainable growth rate of nine per cent with emphasis on a broad-based and inclusive approach that would improve the quality of life and reduce disparities across regions and communities,” according to the Deputy Chairman of the Planning Commission, Mr Montek Singh Ahluwalia, in New York.

Economy growth

Addressing a press conference on the sidelines of the Incredible India@60 campaign, he said that during 2006-07, the investment in infrastructure was five per cent of the total GDP. But if the economy was to continue to grow at nine per cent, then the share of investment in infrastructure would also have to go up to nine per cent by 2011-12. To achieve this figure, a total investment of $492 billion was required over the next five years.

This means the investment in infrastructure would go up from $280 billion to $492 billion; “so we’re going to require an extra $212 billion, more than $40 billion a year.”

From a global viewpoint this might not be a large figure but in the Indian context it meant that the extra money had to be raised and the Planning Commission envisages that 30 per cent of this amount or nearly $145 billion will come from the private sector. He estimated that the private sector would invest about 74 per cent in ports and airports, 67 per cent in telecom, 36 per cent in roads, 26 per cent in power generation and 17 per cent in Railways. “The challenge is to raise the extra $212 billion,” he said.

Pvt sector share

Of the private sector’s share of $145 billion, about 30 per cent or $44 billion could come from equity and the remaining $101 billion through debt. In the public sector’s share too $140 billion of the $240 billion would have to be raised through debt; “now these will be real challenges as we don’t have a very strong debt market,” he said.

A consultation paper on the projections of this quantum of investment in infrastructure during the Eleventh Plan, for which both the State as well as the Central Governments will have to make investments, apart from the private sector, has been put up on the Commission’s Web site ( www.infrastructure.gov.in), and comments and suggestions have been invited.

Mr Ahluwalia added that the Planning Commission will meet in the third week of November to discuss the nitty gritty of the massive dose of investment in infrastructure.

At a glance

Power: Additional power generation capacity of about 70,000 MW, and reaching electricity to all un-electrified hamlets.

National Highways: Six-laning 6,500 km of the Golden Quadrilateral and selected National Highways

Four-laning 6,736 km on North-South and East-West Corridors

Four-laning 12,109 km of National Highways

Widening of 20,000 km of National Highways to two lanes

Developing 1,000 km of Expressways

Constructing 8,737 km of roads, including 3,846 km of National Highways, in the North East

Rural Roads: Constructing 1,65,244 km of new rural roads, and renewing and upgrading existing 1,92,464 km covering 78,304 rural habitations.

Railways: Constructing dedicated freight corridors between Mumbai and Delhi and Ludhiana and Kolkatta

10,300 km of new railway lines; gauge conversion of over 10,000 km

Modernisation and redevelopment of 21 railway stations